Insurers urge Morrison to take on climate action
Insurers around the world have seen a sharp rise in natural catastrophe claims in recent years, which the industry has universally linked to the climate crisis.
This has prompted a global push by the industry for governments and regulators to take the issue seriously.
Following the collapse of former prime minister Malcolm Turnbull’s ill-fated national energy guarantee (NEG), the government’s climate policy does not include any attempt to cap businesses’ emissions, or incentivise low-emissions activities.
Already a return of the NEG is being mooted, with business leaders reportedly favouring it, and former foreign minister Julia Bishop calling on her ex-colleagues to embrace the policy, which had broadly bipartisan support before the right wing of the Liberal Party, led by Tony Abbott, derailed it.
ICA spokesman Campbell Fuller said that while climate change was likely increasing natural disasters, the insurance industry’s main focus was on resilience measures such as flood levies, rather than policies that tackle the root cause of climate change, greenhouse gas emissions.
“The ICA does not believe it is advisable to take a political position on climate change. It seeks to encourage all governments to help communities adapt to the challenges posed by climate change,” Mr Fuller said.
“Permanent mitigation shouldn’t be treated as an afterthought. It should be treated as nation-building infrastructure, because properly designed and maintained mitigation helps ensure that communities can remain economically sustainable.
“In some parts of the country, it can help the economy thrive. So rather than having to be rebuilt every few years through taxpayer funds and insurance, our argument is to reduce the impacts or likelihood of the impact of floods.”
He said only 3 to 5 per cent of disaster funding went towards mitigation, with the vast majority going towards recovery.
He called on the government to adopt the Productivity Commission’s recommendation that the federal government spend $200 million a year on resilience projects, with state and local governments contributing a further $200 million.
Sixteen of the 20 most flood-prone areas of Australia are in Queensland – the state with the most pronounced swings towards the Coalition in Saturday’s election. The rest are in NSW.
Earlier this month, the ICA announced it was developing a climate change strategy.
“The ICA’s goal is to play a thought-leadership role in the transition of our nation to a low-carbon economy by sending a price signal about unacceptable risks and working with governments to help reduce risks through improving the built environment,” ICA president Richard Enthoven said.
“This strategy will also assist our member companies to manage the increasing risks to their businesses associated with climate change.”
Originally published by the AFR, 20 May 2019.